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05/01/89 Capsonic Group, A Division v. Andrew C. Swick

May 1, 1989

CAPSONIC GROUP, A DIVISION OF GABRIEL, INC., PLAINTIFF-APPELLANT

v.

ANDREW C. SWICK, DEFENDANT-APPELLEE



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

537 N.E.2d 1378, 181 Ill. App. 3d 988, 130 Ill. Dec. 909 1989.IL.644

Appeal from the Circuit Court of Kane County; the Hon. Michael J. Colwell, Judge, presiding.

APPELLATE Judges:

JUSTICE McLAREN delivered the opinion of the court. DUNN and INGLIS, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MCLAREN

Plaintiff appeals from the interlocutory order entered by the circuit court of Kane County on December 14, 1988. That order denied plaintiff's request for a preliminary injunction. The court held that it would not enforce a post-employment restrictive covenant in an employment agreement because the plaintiff failed to establish the existence of trade secrets or confidential information that would constitute a protectable interest. We affirm.

Plaintiff, Capsonic Group (Capsonic), is a division of Gabriel, Inc., a privately owned corporation located in Elgin, Illinois. Capsonic was formed in 1968 and is in the business of designing and manufacturing composite plastic/metal parts. Capsonic uses a process known as insert molding. Insert molding is a relatively new technology whereby metal inserts are molded directly into plastic bodies to create one solid piece. Capsonic's emphasis is in the development of customized automated systems for the manufacture of insert-molded parts. Capsonic uses standard components wherever possible so that it can concentrate its design efforts on the overall automated process. Capsonic has approximately 30 to 40 systems in operation, about one-half of which are automated.

An automated production system involves a number of areas or stations where a particular function is performed and different mechanisms which move the products and materials from station to station. One type of station involves a mold that actually forms the product. The other type of station consists of various operations which precede and follow the formation of the molded part. Examples of this type of station are probes to detect defective parts, ejectors to remove defective parts, stampers to imprint the parts, cleaning stations, stations to trim excess plastic or metal, testing stations, and packaging stations. Each station requires a machine or "component" to perform these particular tasks. There are a number of ways to accomplish each task, and, therefore, each station and movement involves a design choice.

Defendant, Andrew Swick, became employed by Capsonic as an automation engineer in December 1985. Swick had not worked with insert molding or in the design of automation systems to manufacture insert-molded products previously. Prior to beginning his employment, Swick was required to sign an employment agreement. The agreement included a clause stating that Swick would not disclose any confidential information. The agreement also contained the following non-competition clauses:

"2. That during the period of his employment by CAPSONIC he will not, without the express written consent of CAPSONIC, engage at any time in any business or activity which competes directly or indirectly with the proper business of CAPSONIC or which is in any other way destructive of or harmful to any of the reasonable business interests of CAPSONIC.

3. After the termination of his employment with CAPSONIC, for any reason whatsoever, he will, when such information should remain confidential in order to protect the reasonable business interests of CAPSONIC, refrain from disclosing at any time the names or addresses of any CAPSONIC customers or CAPSONIC'S past or prospective dealings with its customers, the parties, dates or terms of any of CAPSONIC contracts or the nature of CAPSONIC'S trade secrets, systems, processes or methods or any other information obtained by Employee in the course of this employment with CAPSONIC when such information should remain confidential in order to protect the reasonable business interests of CAPSONIC.

4. After the termination of his employment with CAPSONIC regardless of the nature of or reason for termination, except with the written consent of CAPSONIC, Employee will, to protect the reasonable business interests of CAPSONIC, refrain for a period of two (2) years from entering into direct competition with CAPSONIC in connection with any customer or known prospective customer of CAPSONIC by engaging in or in any way advising, aiding or assisting in any business of manufacturing or selling or otherwise dealing with insert molding products and/or the machines for constructing same, and supplies therefor either as an individual on his own account, or as a partner or joint venturer, or as an employee, agent or salesman of any person or corporation or as a stockholder of any corporation, or in any other manner."

In January 1988, Capsonic revised Swick's employment agreement. This revision did not alter Swick's confidentiality or noncompetition obligations but included a cover letter which outlined certain aspects of these obligations. Swick signed the agreement.

Swick's initial position with Capsonic was as a maintenance engineer. His duties centered on maintaining Capsonic's automated production systems in operation. This included monitoring, testing, repairing, and fine-tuning each system. In 1987, Swick became the manager of Capsonic's automation department. As manager, Swick was responsible for designing the automated production systems as new products were developed and sold by Capsonic. Swick ...


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